Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I will ride the fence on this one. It would be a huge short-term boon to the economy, which is something we need now more than ever. To those complaining that young people would just go out and buy stuff...uhh that's exactly what we want them to do!
In the long term, I do think there could be some dire consequences, especially if future students assume their debt will be washed away like the current generation of loan-carriers did. Personally, I would be a bit resentful since I paid off my student loans in less than three years and have held off on grad school so I could pay for it without taking on loans. I think a lot of other people who paid off their debt would feel the same way.
Whatever happens, I think most of us can agree the current system just flatly sucks. Especially if the goal is more people going to college and more social mobility.
What's in it for everyone who was responsible and paid off their dept?
Why should we pick up your tab.
They did buy things it was call a education, and while they were in school they bought TV's, PlayStation, cars and beer.
Now it's time to pay it back, this to will help the economy.
Quote:
Originally Posted by BoomBoxing
I will ride the fence on this one. It would be a huge short-term boon to the economy, which is something we need now more than ever. To those complaining that young people would just go out and buy stuff...uhh that's exactly what we want them to do!
.
07-26-2012, 08:55 AM
i7pXFLbhE3gq
n/a posts
Quote:
Originally Posted by Octa
I don't think that's going to happen ever. I don't see how how credit downgrades or devaluations have anything to do with it besides being the new buzzwords from some new members of congress. If you really believe that then explain away countries that subsidize education more or completely altogether for every level.
We can't just pull a trillion dollars out of a hat anytime we want without any consequences.
What we could do is raise enough revenue (taxes) to pay for providing tuition-free education, and then actually use that money for education. Neither of those things seems particularly likely. While other countries prioritize things like the health and education of their citizens, we prioritize low taxes and a giant war machine.
Last edited by i7pXFLbhE3gq; 07-26-2012 at 09:12 AM..
The Gov't hands out low interest loans to anyone, for any degree. If you make loans dischargeable, then lenders are going to check and see if your degree path is going to pan out (guess what, no more womans studies majors at NYU).
They teach basic finance in home ec, if you borrow something you will have to pay it back, and for those that complain about having to pay back 2-3 times what that paid in due to interest, the interest is a tax deduction (up to 2,500 a year for loans that went towards qualified educational expenses). How big of a loan has 2,500 in interest a year, way bigger than the average 25k loan. A 25k loan at 6%, compounded monthly over 10 years has a payment of 277.55 a month, or 33,306, for a total interest paid of 8,306 (lets say that's 692.17 a year (although the int will be higher early on and lower later on). 90,000 borrowed would result in 2,500 a year in interest charges (again, over simplified interest but all I have around here is a simple finance calc), 90k is alot to borrow for undergrad, when state school tuition runs around 10k a year and there are many community colleges that offer excellent coursework with which to knock out the lower level courses. Community College doesn't offer the college experience you say, well the taxpayers surely shouldn't bail out the college experience.
But in addition to tax deductions and sub loans, there is also IBR on federal loans, 15% of your discretionary income for 25 years (10 in the public sector) and your loans are forgiven. You say that only applies to federal loans, and that's true, but how much should one really borrow for school?
And I see alot of people mentioning how much more a college grad makes than a non-college grad, well then that college grad should pay for their increased income and not expect the non-college grad to do it for them (if all loans were forgiven then the taxbase, which includes the non-college grads, would be footing the bill).
For those that say that the debt should be forgiven after community service, at what rate should the debt be forgiven, 7.25 an hour, 10.00 an hour 100.00 an hour? I can get behind 14.50 an hour, as those services are being saved all sorts of taxes but any more than that just doesn't make economic sense. And truly if a college grad stands to make twice as much as a non-college grad, shouldn't they be able to find a job that pays more than 14.50 (2x min wage) and pay their own debt off.
Long story short, college is a choice, taking on debt to pay for school is one as well.
They teach basic finance in home ec, if you borrow something you will have to pay it back, and for those that complain about having to pay back 2-3 times what that paid in due to interest, the interest is a tax deduction (up to 2,500 a year for loans that went towards qualified educational expenses). How big of a loan has 2,500 in interest a year, way bigger than the average 25k loan. A 25k loan at 6%, compounded monthly over 10 years has a payment of 277.55 a month, or 33,306, for a total interest paid of 8,306 (lets say that's 692.17 a year (although the int will be higher early on and lower later on). 90,000 borrowed would result in 2,500 a year in interest charges (again, over simplified interest but all I have around here is a simple finance calc), 90k is alot to borrow for undergrad, when state school tuition runs around 10k a year and there are many community colleges that offer excellent coursework with which to knock out the lower level courses. Community College doesn't offer the college experience you say, well the taxpayers surely shouldn't bail out the college experience.
that isnt even considering inflation. yea my loan payments suck but $100 was worth a lot more (both to me as a student and in general with inflation) 6 years ago when i was in college than it is now.
We can't just pull a trillion dollars out of a hat anytime we want without any consequences.
What we could do is raise enough revenue (taxes) to pay for providing tuition-free education, and then actually use that money for education. Neither of those things seems particularly likely. While other countries prioritize things like the health and education of their citizens, we prioritize low taxes and a giant war machine.
I'm not advocating forgiving student loans like that(maybe allowing private loans to be discharged though). It could have some stimulative effects, but I don't think it's worth since it doesn't solve the problem. It only puts a band-aid over it and it'll come knocking at the door again before you know it.
And I agree 100% with you there.
Quote:
Originally Posted by MDrenter223
Just a bit of magic for you all:
The Gov't hands out low interest loans to anyone, for any degree. If you make loans dischargeable, then lenders are going to check and see if your degree path is going to pan out (guess what, no more womans studies majors at NYU).
And I see alot of people mentioning how much more a college grad makes than a non-college grad, well then that college grad should pay for their increased income and not expect the non-college grad to do it for them (if all loans were forgiven then the taxbase, which includes the non-college grads, would be footing the bill).
Long story short, college is a choice, taking on debt to pay for school is one as well.
1) Once upon a time in a land called America, people used to be able to go graduate college with little to no debt because college tuition was affordable and helped created a strong middle class following WWII. If a loan lender(now handled by the govt for federal loans) denies a person a loan during that situation it would be because the amount of risk involved due to high tuition. The student would have to take out a considerable amount of money if he went to an extremely expensive school. IIRC btw, loans didn't even become non-dischargeable until 2005. Why? I haven't found anything about bankruptcy rates but I am curious. As it stands, it seems like a free check to lenders and for profits.
2) The idea that students working on their doctorates and masters degrees make more is exactly why they don't get grants. Having an advanced degree increases their earning potential which means they shouldn't need much assistance paying off their debt. As JasonF says, it all comes to what the people in a country value. There are many things tax revenue pays for that you don't even benefit from(which is why I never understood why people think that's a serious argument).
3) Yeah I guess it is a choice much like how it's a choice for a child to choose between brocoli or spinach before he's allowed to get dessert. Taking on debt as tuition continues to climb upward is the lesser of two evils, but unless someone is born with a silver spoon in his mouth or just gets extremely lucky, the degree is the better choice. Yes, you're probably going to have someone say soon that they have a friend of a friend who makes 100k with a high school diploma, but they're the exception. Most high school grads don't make that much money and will never even make the amount the amount someone with several years of experience with a degree will. Debt might be bad, but so is busting your ass working retail for the next 20 years.Again, it comes down to what people prioritize and apparently pulling up our bootstraps while simultaneously funding rail guns that can mount onto navy ships is what the people in this prioritize. Oh and "small" government as well.
Quote:
Originally Posted by brocco
that isnt even considering inflation. yea my loan payments suck but $100 was worth a lot more (both to me as a student and in general with inflation) 6 years ago when i was in college than it is now.
Yeah I wouldn't rely on inflation though. Unfortunately the Fed is pretty adamant about maintaining a 2% inflation target even though unemployment remains so high.
2) The idea that students working on their doctorates and masters degrees make more is exactly why they don't get grants. Having an advanced degree increases their earning potential which means they shouldn't need much assistance paying off their debt. As JasonF says, it all comes to what the people in a country value. There are many things tax revenue pays for that you don't even benefit from(which is why I never understood why people think that's a serious argument).
There is a massive amount of grant money available for doctoral students. In fact, most are paid $15,000 to $30,000 a year by their schools and don't pay any tuition (though they may have to borrow a bit to cover expenses). Way more aid is available to grad students. Though that's not true in business, law or medical school I don't think.
Many people owe loans taken out prior to the bankruptcy reform. In essence, they borrowed under the assumption that if they fell on severe economic hardship? Bankruptcy would be an option. Last resort, but at least it was there.
Many have had to borrow both subsidized and unsubsidized Stafford loans. Any clue how quickly interest accrues on an unsub Stafford loan (with variable interest rates)? Hint: RAPIDLY
Many ARE paying back loans, but for so many years that they go into retirement with student loan debt. Think they won't take your Social Security to pay student loans back? Think again. They don't care if you starve.
In short, privatizing student loans and making them pretty much impossible to discharge in a bankruptcy has made for a disgustingly corrupt student loan racket.
I don't think loans should just be discharged for no reason. I do think we need bankruptcy protection and forgiveness on unchecked interest and a payment plan that'll allow borrowers to spend money on things that actually stimulate the economy, though.
I'm amazed at the lack of empathy that the most virulent anti-student loan reform people have.
__________________
When in doubt, check it out: FAQ
There is a massive amount of grant money available for doctoral students. In fact, most are paid $15,000 to $30,000 a year by their schools and don't pay any tuition (though they may have to borrow a bit to cover expenses). Way more aid is available to grad students. Though that's not true in business, law or medical school I don't think.
From the federal government? Didn't know that. All I had available to me(grad) was just some money from the state and school for being an assistant and going into a shortage area. I knew that ph.d candidate could also get money for teaching courses, but I didn't know it was that much. Maybe I just might re-considering continuing on afterall
From the federal government? Didn't know that. All I had available to me(grad) was just some money from the state and school for being an assistant and going into a shortage area. I knew that ph.d candidate could also get money for teaching courses, but I didn't know it was that much. Maybe I just might re-considering continuing on afterall
Aid for grad students is generally provided by the universities. It is also generally required that the student work for the aid.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
